ACIS 3115 Chapter Notes - Chapter 13: Bear Stearns, Promissory Note, Gift Card

• School: Virginia Tech
• Department: Accounting and Information Systems
• Course: ACIS 3115
• Professor: brovozsky

Document Summary

Liabilities: money to pay for assets from-> funds from owners or borrowing- most common type=paid in cash w/ specified amount & timing in contract. 3 chars (&4 contng l): 1) probable, future sacrifices of economic benefits 2) arise from present obligations to other entities 3) result from past transactions or events. Current l: payable within 1 yr or op cycle, whichevers longer or expected to be satisfied with current assets or by creation of current ls. Current & lt so investors & creditors assess risk that l will require asset in near future. Bear stearns relied on st ls that couldn"t refi when leaders were worried. Liabilities- should be recorded at pv but in practice, ls payable within 1 yr are recorded at maturity amt. inconsistency nbd bc st so interest & time value immaterial. Common cls: ap, np, commercial paper, income tax l, dividends payable, accrued ls.